Economic Linkage: What to Link?

Abstract

We have already elaborated on the point that economic relations between countries can make one state dependent upon its trading partner, thus endangering national independence and national security. In such circumstances of asymmetrical interdependence, economic relations can become a political instrument, a lever of power. This economic lever can be used to obtain particular economic and political goals. In the political literature on East-West economic relations, these aspects of power are usually captured under the label economic leverage, and, if consistently applied, economic linkage.¹ The main objective of these strategies has been to influence other actors by the manipulation of economic instruments. This can be done by positive inducements (keeping in mind that these benefits may eventually be abruptly removed); or by several forms of trade denial, that is to say, economic sanctions. Both aspects seem to be different, but they are actually rooted in the very same conceptual framework (see our discussion on economic power, in Chapter 7).